Former NHA contractor gets 51 months, NHA left with $11 million bill

William Aubrey, who was convicted of defrauding the federal government in a homebuilding scheme on the Navajo Reservation, will spend more than four years in prison, according to a press release issued Tuesday by the U.S. Attorney's Office.

A federal jury in Las Vegas convicted Aubrey, 71, of Mesquite, Nev., in May of two counts of taking and converting money and funds belonging to a tribal organization. Aubrey allegedly used money taken from the grant program to pay for his own gambling debts and other personal expenses.

He was sentenced to 51 months in jail.

A second person charged at the same time, Chester Carl, a former director of Navajo Housing Authority, was found not guilty.

A hearing to decide the amount of restitution Aubrey owes is scheduled for Oct. 15. Aubrey must report to a federal prison on Jan. 3.

According to court records and the evidence introduced at trial, Fort Defiance Housing Corporation was a Navajo Nation non-profit corporation entrusted by the NHA to manage federal housing funds granted to the Navajo Nation.

Fort Defiance Housing Corporation contracted with Lodgebuilder, a for-profit construction company owned and operated by Aubrey, to oversee the construction of several housing developments including the project near Chilchinbeto in 2003. Fort Defiance Housing Corporation also empowered Aubrey to manage the federal housing funds granted to that non-profit corporation for purposes of paying subcontractors, suppliers and other construction expenses.

Aubrey mismanaged and failed to account for those grant funds. Aubrey transferred the housing grant funds into his own personal account and misused a substantial portion of the funds to pay his own gambling debts and other personal expenses.

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At the same time that the federal court is going after Aubrey to repay back the money he had been convicted of defrauding the tribe and HUD, the federal agency is also going after the NHA for the money as well.

"Approximately $11,751,274 in (federal housing) funds were expended on the construction of 91 single family homes that have never been inhabited and therefore never used for affordable housing activities," according to a Sept. 5 letter to NHA.

To correct that, HUD officials said NHA must "repay with non-HUD resources" these funds.

Aneva Yazzie, who took over NHA in 2007, vowed on Wednesday that NHA would fight this, adding that this is just one of the things that happened prior to 2007 that she now has to address.

Because of this kind of situation, she said, people continue to point fingers at NHA management.

"This has made us look bad in the eyes of the public, when all of this happened before I came on board," Yazzie said.

In a perfect world, Aubrey would have to pay the money back but he has already declared bankruptcy and there are serious questions about whether he would be able to repay any amounts that the federal court would order him to pay.

Yazzie said she plans to make the court aware of Aubrey's responsibility in this matter when the matter comes up for discussion on Oct. 15.

She said she also plans to meet with officials for HUD and explain to them that NHA did not have total supervision over the project.

She said a review of the records from 2003 revealed that the project was allowed to get underway even though there were concerns about whether an environment assessment was properly done and claims by some of the land users in the area as to whether they had given their approval for the land to be used for the project.

At the time, she said, HUD had some responsibility to make sure that the project had the proper clearances and approvals and if the project was begun without the proper clearances, HUD will have to assume some of the responsibility for the problems that arose afterwards.